The fiat-to-Bitcoin and Bitcoin-to-fiat avenues are being cut off systematically. So quietly and innocently the banks pinch the hose. Cheering that a measly P2P program has stirred such a ruckus, I acknowledge that this is both a reason to mourn and celebrate.
Every time that I get stressed out, about anything, I remind myself that I’m an averagely established mammal, resting on my bottom, atop a giant pseudosphere that hurls itself about a nuclear furnace at almost half a million miles per hour.
Then I feel a bit better.
Life is stressful today, particularly because of its uncertainty, but it’s always been stressful, and typically worse so.
These days, we are faced with the stress of what to do with our savings. Historically, this has always been an issue. Back in the savannah, we may have quarreled about what to do with our heap of ferret pelts. Today, we agonize over 401Ks, IRAs, trading accounts, insurance programs, and hard assets.
One of the most valuable lessons that I have learned during my obsession with Bitcoin, is that it is important to question the things that we hold true.
Bitcoiner Erik Voorhees, former purveyor of Satoshi Dice, has regularly published exposes on the nature of money – explicitly, why it is curious that people spend so much time chasing the thing without questioning its significance.
So what do we hold true? What ARE ferret pelts? Certainly, we have faith that a dollar accepted is a dollar earned. The US dollar is the de facto world currency for all remittances, payments, and debts. Of course there is some inflation but – whatever – we have to make a living. Right?
Bringing us back to the speedy sphere, we should take special heed that, observing both geography and time, at least 150 previous fiat currencies have failed – or more precisely, that paper money always converges on its true value, which is close to zero.
It is easy to look about oneself, and decide that everything is OK, that everything is as it seems. But beware! Perhaps the US dollar is not so simple.
Rewind to 1971 when Nixon officially decoupled the dollar from gold. Suddenly, the world, which had become accustomed to pricing its goods in gold was confronted with the problem of inconvertibility. No longer could they do so. The collective response: OK, forget gold, we’ll go along with these pieces of paper.
The analogy holds true: Bitcoin to US dollar inconvertibility may, in fact, be reminiscent of the dollar/gold inconvertibility. Yet, in this case, in contrast to an unfortunate decision to prioritize fiat currency over sound money, society can reverse the transition – discarding dubious dollars for (yes, it’s an experiment), Bitcoin.
I’d give it 5 years. Things move fast these days.